Jindal Steel share price targets post Q1 earnings signal fresh record highs 

Shares of Jindal Steel and Power Ltd slipped over 5% in early deals on Thursday after the metal firm reported a 20.9% year-on-year (YoY) fall in net profit for the June 2024 quarter. Profit slipped to Rs 1,337.9 crore for the first quarter that ended June 30, 2024 against a net profit of Rs 1,691.8 crore.

Jindal Steel stock fell 5.40% to Rs 919.55 on BSE. Market cap of the metal firm slipped to Rs 95,056 crore. The stock has risen 25.47 per cent since the beginning of this year and risen 40 per cent in one year. JSPL shares have delivered multibagger returns of 152% in the last two years.

On Thursday, Jindal Steel shares saw a high turnover of Rs 8.68 crore as 0.93 lakh shares of the firm changed hands on BSE. Jindal Steel stock hit a record high of Rs 1097.10 on June 21, 2024.

The stock has a one-year beta of 1.1, indicating high volatility during the period. However, the stock is neither overbought nor oversold on charts with the relative strength index (RSI) of Jindal Steel at 39. Jindal Steel shares are trading lower than the 10 day, 30 day, 50 day, 100 day but lower than the 150 day and 200 day moving averages.

Revenue from operations climbed 8.2% to Rs 13,617.8 crore in the June 2024 quarter against Rs 12,588 crore in the corresponding period of the preceding fiscal. Operating profit climbed 8% to Rs 2,839.2 crore in the first quarter of this fiscal over Rs 2,628 crore in the year-ago period.

JM Financial has assigned a price target of Rs 1128, up 16%. The previous targtet was Rs 1061.

"The total capex for the quarter was Rs 28 billion largely driven by the expansion projects in India – time over run observed in certain modules of the 6 mtpa expansion. With a strong balance sheet to support growth capex, increasing raw material security and strong volume growth pipeline, JSPL remains well positioned to withstand cyclical challenges – subject to execution risk. Re-iterate BUY," said Jindal Steel.

Motilal Oswal has maintained its buy rating on the stock with a price target of Rs 1,200.

“While 1Q EBITDA was marginally lower than our estimate, the outlook remains bright. JSPL foresees coking coal/iron costs to be lower in 2QFY25, translating into a better margin despite softening NSR. The ongoing capex would lead to more value-added products, which would yield better profitability. We broadly retain our estimates and reiterate our BUY rating on JSPL with a price target of Rs 1200, based on 7x FY26E EV/EBITDA. The stock is currently trading at 5.8x FY26E EV/EBITDA and 1.7x FY26E P/B,” said Motilal Oswal.

Brokerage Nuvama has maintained its buy call with a price target of Rs 1,185 post Q1 earnings. 

"We reckon steel prices shall bottom out soon and recover in Q3FY25, inflating profitability in H2FY25. The commissioning of 3.3mtpa by FY25-end shall act as a major trigger for the stock as it provides volume growth visibility. Reiterate ‘BUY’ with an unchanged price target of Rs 1,185, valuing at 7.0x FY26E EV/EBITDA," said Nuvama.